Schering-Plough fines

31st August 2006

The US pharmaceutical company, Schering-Plough, has pleaded guilty to conspiracy to mislead the government and agreed to pay $435m. This resolves a six-year Department of Justice investigation into alleged illegal sales and marketing practices.

Fred Hassan, chairman and chief executive, has also settled a Securities and Exchange Commission probe of senior management's selective disclosure of information to investment analysts. The company has also paid fines to end a investigation by federal prosecutors in Philadelphia over illegal payments to customers.

In the late 1990s, Federal prosecutors said that in the late 1990s Schering-Plough misled federal healthcare programmes over its best price for an allergy drug, Claritin Redi-Tabs. Schering-Plough agreed to pay a $180m criminal fine for lying to the FDA and federal healthcare programme authorities over its pricing and marketing practices.

The company had improperly marketed two cancer drugs, Temodar and Intron A, for uses not approved by the FDA, said Federal prosecutors. It lied to the FDA, saying the improper marketing was "isolated", when "in fact the company knew and expected those activities to continue", prosecutors continued. Schering-Plough also agreed to pay $255m to settle civil allegations.